The Mediating Effect of Strategic Agility on the Relationship Between Absorptive Capacity and Organizational Performance: An Empirical Investigation

Objectives: The study was to investigate how absorptive capacity affected upstream oil and gas businesses performance in Lagos State, Nigeria, and how strategic agility mediated this relationship. Theoretival Framework: The relationship between the variables provided further empirical support for the Survival-based theory. It confirmed that for organisations to survive, they must constantly adjust to changes in their competitive environment. Methodology: A survey study strategy was chosen with total enumeration of 40 upstream operators in Lagos State, Nigeria. Cronbach alpha coefficients and Average Variance Extracted values demonstrated the research instrument's strong validity and reliability. Three members of each company's middle and higher management received instruments. For the data analysis, Smart PLS-SEM Version 3.0 was utilized. Results and Discussion: The results indicated that absorptive capacity had a significant direct impact on the performance of the upstream oil and gas companies and had an indirect effect through the mediation of strategic agility. Research Implications: The study recommended that managers of this sector consistently inculcate strategic agility and absorptive capacity principles in modeling their strategies. They should also plan to identify, analyse, absorb, and integrate new knowledge from their competitive environment into their operations with fast speed, competence, flexibility, and responsiveness. Originality/Value: The study contributes to an expanding body of knowledge in strategic management that links absorptive capacity to strategic agility and confirms that an organisation’s success is largely dependent on how well it aligns with the results of this study. Specifically, managers of oil and gas businesses should always incorporate strategic agility considerations while modelling their strategy.